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About Those Buyout Rumors

Monday - 6/28/2010, 4:00am EDT

Senior Correspondent Mike Causey has stepped away from the keyboard for a much-needed break. While he's searching for his inner vuvuzela we present "The Most Popular Federal Reports of the Year... So Far". This column was originally published on March 10th. sk

Very little in this column is true which, by and large, is a good thing.

If you haven't heard about a pending early retirement/buyout/layoff plan being cooked up by Uncle Sam, either you haven't been listening, or you've been a fed for a long time and have heard this before. Many times.

Rumors of a government-wide or agency-specific plan to encourage feds to leave are, according to in-the-know-officials, just that. Federal unions and management groups confirm that the chatter is there, but it's all hot air.

With the exception of the National Aeronautics and Space Administration and the U.S. Postal Service (admittedly two big exceptions) most federal operations aren't in a position where they want or need to trim the workforce. Or to offer incentives to get people to take early-retirement.

Last year 1,233 federal workers (outside of the U.S. Postal Service) took early retirement. When okayed by agencies, workers under the CSRS retirement plan (the one that covers most retirement-eligible employees) can leave on immediate annuity at age 50 with 20 years of service or at any age with 25 years of federal service.

In 2005 more than 7,500 feds took early outs. That dropped to 5,700 in 2006, to 4,700 in 2007 and 3,510 in 2008. Bottom line is that although agencies continue to offer early retirement (in very,very rare cases with a $25,000 buyout payment) there are few takers.

Despite the the lack-of-interest in or need for early outs, those hope-springs-eternal rumors persist. In addition to alleged buyout/early out plans, the false reports speak of major upcoming reductions-in-force although RIFs have been a non-starter since the Clinton administration downsized government. The fact is that some of the rumors are decades old. If your parents were civil servants, odds are Mom and Dad were spooked too. Until they had been around for while. Some of the hit-the-road rumors are decades old.

In several agencies, according to the rumor mill, a buyout-early out package is "on the desk" of the big boss. Probably not.

The last presidential election jump-started a rumor that the new administration would make efforts to encourage old-timers to retire so that bright, fresh talent could surge into government. Another was that Congress might re-impose mandatory retirement (at age 65 or 70) across-the-government. While that is far-fetched and unlikely the government did have a mandatory retirement age (70) up until the mid-1970s.

Other recycled rumors racing around the internet include a much updated (but bogus) proposal to give workers an extra 5 years credit (in both age and service) to encourage them to leave. When it first surfaced, the alleged buyout would have been $5,000. That has been adjusted for inflation (although it is equally incorrect) to $50,000 or, in some versions, six months salary.

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